Asourceofinsights,newsandstrategyonpayequitymatters

The New Jersey Division on Civil Rights (DCR) has released a 25-page guidance explaining its enforcement policies with respect to the state’s equal pay law. The guidance provides much-needed direction to companies navigating the pitfalls associated with compensation systems and policies.

The guidance addresses questions ranging from multistate employees to affirmative defenses to the role of employer self-evaluations in the agency process.

Prior pay, alone or in combination with other factors, is not a job-related “factor other than sex” that can be used to justify a difference in pay under the Equal Pay Act (EPA), a majority of judges on the U.S. Court of Appeals for the Ninth Circuit has held again. Rizo v. Yovino, No. 16-15372 (Feb. 27, 2020).

The Court previously reached this conclusion in 2018. On appeal to the U.S. Supreme Court, the Supreme Court remanded the case because the authoring judge (Judge Stephen Reinhardt) passed away before publication of the opinion.

Please find the rest of this article on the Jackson Lewis Publications page here.

It seems the end has finally come for at least one part of the pay data reporting story. On Monday, February 10, Judge Chutkan ordered the EEO-1 Component 2 pay data reporting portal closed. The closing of the portal signals the end of the required collection of pay data for 2017 and 2018 from eligible employers.

The direction for the next turn in the story hinges on what EEOC decides to do about collecting pay data going forward. Stay tuned.

EEOC has filed another Motion with the court seeking an Order deeming Component 2 pay data collection complete. In its most recent filing, EEOC requests the Court to revisit its previous decision and deem the collection obligation satisfied or, in the alternative, provide clarification “regarding the response rate at which the Court will deem the EEOC’s collection to be complete.” As a reminder, EEOC’s previous motion requesting the permission to close the portal was denied.

A federal jury in Iowa has rejected Equal Pay Act claims by a female physician alleging she was paid less than her male colleagues in the same network for performing substantially equal work under the same compensation formula. Bertroche v. Mercy Physician Assoc., Inc., No. 1:18-cv-00059 (N.D. Iowa Nov. 13, 2019).

The jury also found the physician network that employed her did not breach her employment agreement. After a six-day trial, the federal jury deliberated for less than three hours before delivering a complete defense verdict.

Please find the rest of this article on our Healthcare Workplace Update here.

Following the most recent Court Order, EEOC has provided the court with a current update as to its compliance with the Court’s Order that it continue to keep the EEO-1 Component 2 pay data reporting portal open. The Court has ordered the portal remain open until at least January 31, 2020 to allow additional filers to submit their reports.

Despite its request to close the pay data reporting portal, Judge Chutkan has ordered EEOC to continue to keep the EEO-1 Component 2 Pay Data Reporting Portal open to allow more filers to submit their pay data. The Order states, despite the acknowledged expense, that EEOC “must continue to take all steps necessary to complete the EEO-1 Component 2 data collection for calendar years 2017 and 2018 by January 31, 2020.”

Please find the rest of this article on our Affirmative Action & OFCCP Law Advisor here.

A majority of employers (60%) are not only conducting analyses to identify and address pay equity issues, but are conducting analyses with the objective of “resolving the root causes” of identified pay inequities, according to “Pay Equity Practices – Survey of C-Suite and Reward Leaders” from WorldatWork and Korn Ferry.

Recent media reports on government agency pay discrimination settlements, ranging into the millions of dollars, show that they typically date to pay practices at least several years in the past. But, if the survey findings hold up, such pay equity settlements may decline in the future.

The WorldatWork and Korn Ferry report says employers are taking action for a number of reasons:

“Build/maintain a culture of organization trust”

“Remove bias from programs and practices”

“Because it makes business sense to do so”

Survey results reveal pay analyses initiatives typically are driven by the C-Suite or Human Resources. The report notes, “The legal function, while not owning the process are often an integral part of the team, esp., in larger organizations.” The bottom line is pay equity analyses can be protected by the attorney-client privilege only if the analyses are conducted at the direction of counsel for the purpose of providing legal advice and are kept confidential.

On confidentiality and disclosure of analyses results, the report states, “Most organizations broadly communicate the intent and general findings of the pay equity analysis to senior leaders, followed by people managers.” It also notes that only a “minority of organizations provide broad-based communications to employees.” Decisions about whether and to what extent to communicate analyses results are fraught because employers cannot publicize results while maintaining the attorney-client privilege.

In the next chapter of the pay data reporting saga, the EEOC has filed a Motion with the court seeking an order “determining that the EEO-1 Component 2 data collection is deemed complete.” The EEOC is reporting that, “as October 8, 2019, 75.9% of eligible filers had submitted Component 2 data.”

Amendments to Illinois’ Equal Pay Act (EPA) go into effect on September 29, 2019, leaving employers little time to adjust their hiring practices.

No Inquiries into Salary History. Under the amended EPA, employers and employment agencies may not:

Screen applicants based on their current or prior wage or salary history, including benefits or other compensation;

Request or require an applicant’s salary history as a condition of being considered for employment; or

Request or require that an applicant disclose his or her salary history as a condition of employment.

Employers also are prohibited from seeking an applicant’s salary history from an applicant’s current or former employer.

Employers are not prohibited however, from (i) providing information about the compensation or benefits of a position, or (ii) discussing an applicant’s expectations about compensation or benefits. An employer also would not violate the EPA if a job applicant voluntarily discloses his or her current or prior compensation, provided the employer does not consider the voluntary disclosure in deciding whether to offer the applicant employment or in setting compensation.

An employer found to have violated the law may be subject to:

Damages;

Special damages not to exceed $10,000;

Injunctive relief;

Costs and reasonable attorney’s fees; and

Civil penalty not to exceed $5,000 for each violation for each employee affected.

In order to avoid fines and lawsuits, companies recruiting in Illinois should remove any questions about an applicant’s previous pay or benefits from their job applications and any related documents, both on-line or in hard copy.

No Restrictions on an Employee’s Own Disclosure. The new law prohibits employers from requiring employees to sign contracts or waivers preventing them from disclosing information regarding their own wages, salary, benefits, or other compensation. Employers, however, may prohibit Human Resources personnel from disclosing other employees’ wage information without first obtaining written consent.

Broader Definition for “Comparators.” The new law expands the definition of applicable comparators. Previously, the Act prohibited pay discrimination where employees were performing substantially similar work on jobs that required “equal skill, effort and responsibility.” The amended Act refers to employees who are performing substantially similar work on jobs requiring “substantially similar skill, effort, and responsibility.”

Limited Exceptions to Equal Pay Treatment. Under the previous law, exceptions for pay differentials mirrored the federal Equal Pay Act and could be based on: i) seniority; ii) merit; iii) measures of earning based on quantity or quality of production; or iv) a factor other than sex, race, or unlawful discrimination. Under the amended law, any factor other than sex, race, or a factor that would constitute unlawful discrimination must also: (i) not be derived from a differential in compensation based on sex, race, or another protected characteristic; (ii) relate to the job or business needs; and (iii) actually account for the differential.

More information can be found in our other articles on the Illinois EPA. Members of Jackson Lewis’ Pay Equity Resource Group can also offer guidance to employers to ensure compliance with the law’s amended provisions.

Jackson Lewis P.C.

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